Cattle futures are working on a second week of sharp losses as market uncertainty begins to overshadow current fundamentals. The saying, “bull markets take the stairs up, and the elevator down, ” held true for the protein market over the past week or so.
Live cattle futures closed fractionally lower on Tuesday at $226.92 per cwt. The market blew through the $230 support level on Monday and touched limit-down before recovering some losses. That was also the first close below the 100-day moving average since April. The technical indicator also limited gains today.
The sharp selloff came as the Trump administration has been focused a lot on the cattle and beef industry recently, largely due to record beef prices. Last week, the administration released a package that includes increased access for grazing on federal lands, increased insurance subsidies, and lowered production costs.
USDA Secretary Brooke Rollins also mentioned boosting processing capacity. However, the measure may have a limited impact due to extremely low cattle supplies.
Additionally, the Trump administration announced its plan to raise its tariff-rate quota (TRQ) for Argentine beef in a bid to lower beef prices. Bloomberg reported that the TRQ would be raised to 80,000 metric tons (MT), quadruple the current level.
U.S. beef imports from Argentina had already been increasing over the past year due to strong beef demand, according to U.S. Census data. Still, shipments from the country only accounted for about two percent of total beef imports in 2024 despite a 37 percent increase from the previous year.
Despite the negative headlines, wholesale beef prices continued to move higher to start the week. The choice cutout value rose to $378.68 per cwt by midday on Tuesday, which followed a $2.12 gain on Monday. Prices are now trading at the highest in about a month.
January feeder cattle traded $9.62 lower to close at $324.80 per cwt. Prices took advantage of their expanded trading limits, as feeders closed limit-down on Monday after a gap open lower, and again traded more than $12 lower today before recouping some losses.
Feeder cattle auctions last week showed a step back in prices but remained relatively stable. However, uncertainty over the past few days led to a sharp drop in auction prices on Monday. Feeder steers sold $25-$40 lower at the Joplin Regional Stockyards in Carthage, Missouri. Similar declines were reported in Worthing, South Dakota, where yearling steers and heifers sold $25-$30 lower.
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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.